Coach house dilemma

NozeyParker

I live in a coach house which is essentially a two bed flat above four garages. I own the freehold of the building incl one garage; the other three are leased to neighbours who are required to contribute towards my home insurance if I ask for it. However, I've just asked the leaseholders to contribute to my home insurance much to their disgust and I fear they won't contribute at all. Any experts have any ideas on what I can do about this as it's a clear contract breach. I've gone back to the developer who own the three garages (I'm freehold) to see what action they may take - probably not much. But should I consider a small claims court? The sum is £30 each from 3 households which over the years will be a lot of money lost to me if I don't set the right tone now as I've just moved in. Any advice or notes of caution?

Daniel54

Does the lease set out a percentage contribution to the buildings insurance ,or is it a figure you have somehow arrived at ( seems high to me)

Bear in mind you may lose a lot more money if you have to declare a neighbour dispute when you come to sell.

Setting the right tone with your neighbours might involve a nominal contribution to establish the principle ( if you feel there is a principle which requires establishment)?

G_M

I suspect you may have presented this to them badly. I really doubt that they are "required to contribute towards my home insurance" (though I may be wrong).

More likely they are required to contribute towards the total cost of insuring the building. A subtle distinction perhaps, but to them "insuring your home" would indeed disgust them, whereas 'insuring their garage" they might see as sensible.

What exactly does their lease say?

a) in terms of the wording ('insure the building'? 'insure your home'? 'insure the garage'?.......)

b) in terms of the amount; %; or share

The developers are unlikely to do anything as it s nothing to do with them. And if they do take action (eg send a letter) the garage leaseholders could (should) just bin it.

This is a matter between the freeholder (yourself) and the leaseholders (of the garages), with the legal responsibilities (eg yours, to insure) and obligations (eg theirs, to contribute) laid down in the leases.

Which you need to read, understand, and then, if required, enforce.

Your options are:

1) invite them to tea, explain, over a slice of cake, how this is for their benefit to protect their garage (and contents perhaps)

2) send a formal letter, enclosing a copy of their lease, with the relevant clause highlighted, and the insurance quote/policy etc, and showing how the amount you are demanding is calculated (in accordance with the lease), and requesting payment within, say, 7 days. Pont out that late payment may result in interest charges and or admin fees (if the lease allows - read it!).

3) pay a solicitor to send a letter as 2) above

4) apply to the courts for the amount due

For more, see:

http://www.lease-advice.org/information/faqs/faq.asp?item=126

giddypenguin

We live next door to a coach house, which is above our garage. The lease states we should contribute to any increased costs on the coach house's insurance - we offered but our neighbours said the cost difference was so small it wasn't worth their while collecting it.

Therefore £30 from each leaseholder sounds (to me) a lot - are you claiming your entire house insurance premium back? If so that's not fair!! Otherwise, get a better deal!

TrickyDicky101

£30 per garage? I bet they weren't happy! I wouldnt expect them to contribute anything now after that idiotic demand.

G_M

I can't see how we can comment on the £30 without knowing

* what the total premium is
* what precise cover is provided
* what other insurers quoted
* what the lease says about apportionment

NozeyParker

I see where I've gone wrong. Thanks for the advice GM.

Jon_B_2

Sounds like the lesson here is to fully do your research before risking !!!!ing your neighbours off.

G_M

Just dug this out for a different thread. Might be useful:

http://www.lease-advice.org/publications/documents/document.asp?item=14#23

The Commonhold and Leasehold Reform Act 2002 introduced rights in respect of administration charges. These are defined as 'an amount payable by a tenant as part of or in addition to rent, which is payable directly or indirectly for:

• the grant of approvals under the lease or applications for such approvals;
• for or in connection with the provision of information or documents by or on behalf of the landlord or a person party to the lease other than the landlord or tenant;
• costs arising from non-payment of a sum due to the landlord;
• costs arising in connection with a breach (or alleged breach) of the lease.'

Any administration charge demanded by the landlord must be reasonable in order for the landlord to recover the charge, and must be accompanied by a summary of the leaseholder's rights and obligations in respect of administration charges. If the summary is not included, the charge is not regarded as being payable.
In some cases a lease also allows the recovery of legal costs incurred in courts and or tribunals to be recovered from an individual leaseholder. This can arise on occasion from two scenarios:

1. costs arising from non-payment of a sum due to the landlord; and/or
2. costs arising in connection with a breach (or alleged breach) of the lease

When the costs incurred result from one or other of these they will be technically classed as an Administration Charge. Such charges must be reasonable, amongst other things, in order to be payable; but if they are reasonable and payable they are recouped from an individual leaseholder. It follows that the lease should be reviewed to establish if there is an obligation on a leaseholder to pay an Administration Charge where there is any prospect of legal costs being incurred.